Did you know that Petal credit card is best for anyone nurturing a fair credit history? In fact, It’s one of the only no-annual-fee cards available to those with fair credit with the potential to earn up to 1.5% cashback, making it a rare specimen among unsecured credit cards aimed at building credit. See the full details!
Overview of Petal Credit Card
The Petal® 2 “Cash Back, No Fees” Visa® Credit Card is a wonderful choice if you’re just starting out with credit.
You’ll get simplicity and transparency: no deposit requirement, no fees, a decent travel partner, and possibly a higher credit limit than you’ll find elsewhere in its category.
Additionally, you’ll be incentivized to pay your bill on time to earn rewards, which can help you develop responsible habits for the future.
Highlights of Petal Credit Card
- No fees whatsoever. No late fee, international fee, annual fee, or any other kind of fee fee.
- Up to 1.5% cash back after making 12 on-time monthly payments
- 1% cash back on eligible purchases right away
- 2% – 10% cash back from select merchants
- $500-$10,000 credit limits
- Variable APRs 12.99%-26.99%
- Build credit alongside tens of thousands of Petal Card members
- Cash flow technology may help applicants without credit history get approved
- Petal’s mobile app makes it easy to manage your money, track your spending, and automate payments
- See if you’re pre-approved within minutes without impacting your credit score
- Petal reports to all 3 major credit bureaus
- No deposits required
- Card issued by WebBank, Member FDIC
Fees & Interest of Petal Credit Card
- 12.99% – 26.99% (Variable) APR
- No introductory APR offered
- $500 minimum and can reach up to $10,000
- Annual Fee: $0
- Late Penalty: None
- Foreign Purchase Transaction Fee: $0
- Returned Payment Fee: None
Card Benefits of Petal Credit Card
- Uber Credit Via Visa Offers: Register your Visa through your Uber account and automatically earn Uber credits when you use your card to purchase Visa Offers
- Auto Rental Collision Insurance: Receive secondary rental car coverage for damage or theft to your rental vehicle when you pay with your Petal 1 card and decline the rental company’s collision damage waiver
- Roadside Dispatch: Get access to roadside dispatch, Visa’s pay-per-use roadside assistance program
- Lost or Stolen Card Assistance: Visa can help you get an emergency replacement card and arrange for cash to be delivered to you
Earning Rewards of Petal Credit Card
The Petal 2 Visa Credit Card works on a tiered cash-back rewards system that rewards cardholders for making on-time payments.
Cardholders automatically earn 1% cashback on eligible purchases and have the opportunity to earn 1.25% cashback after six on-time, monthly payments and 1.5% cashback after 12 on-time, monthly payments.
This is in addition to any purchases you might make that qualify for bonus rewards via Petal Offers.
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Redeeming Rewards of Petal Credit Card
You can redeem your Petal 2 card rewards in any amount at any time as a statement credit by logging into your Petal card account and selecting “Perks” and then “Redeem.”
You can also redeem by calling Petal and requesting a paper check be mailed to you or to receive a deposit to a qualifying checking account starting at a minimum of $20.
Pros of the Petal Credit Card
No Security Deposit
Many cards designed for those with limited credit are secured products, meaning they require an upfront cash deposit as collateral, usually at least a few hundred dollars which is equal to your credit limit.
You get the deposit back when you close the account (or upgrade it to an unsecured card), but it’s money you’ve got to come up with on the front end. The Petal® 2 “Cash Back, No Fees” Visa® Credit Card has no such requirement.
A Solid Rewards Program
The 1.5% maximum cash-back rate on the Petal® 2 “Cash Back, No Fees” Visa® Credit Card equals the ongoing rate on stalwart cards like the Capital One Quicksilver Cash Rewards Credit Card and the Chase Freedom Unlimited®.
You’ll need a year of on-time payments to work your way up to the top rate, but even the 1% base rate is better than what you’ll get on most starter cards.
Petal® 2 “Cash Back, No Fees” Visa® Credit Card cardholders pay no fees. That means a $0 annual fee, no late fees, no foreign transaction fees, or any other fees.
You also won’t be charged a penalty APR if you’re late on a payment (although paying late can affect your credit scores).
The company makes money from merchant transaction fees and interest paid on revolving balances.
You can avoid interest charges by paying your bill in full every month. Paying on time will also keep your credit scores in good shape.
Potentially High Credit Limit
Starter cards are known for low credit limits, but the Petal® 2 “Cash Back, No Fees” Visa® Credit Card offers up to $10,000 for those who qualify for such a limit (based on creditworthiness).
With secured cards, your credit limit generally is only as high as the amount of your security deposit. Other alternative credit cards tend to offer lower credit limits.
Worthy Travel Companion
The Petal® 2 “Cash Back, No Fees” Visa® Credit Card is a travel-friendly card that can save you money abroad.
It has no foreign transaction fees, which generally range from 1% to 3% per transaction for other credit cards. As a Visa card, it also has broad international acceptance.
This Petal credit card has a few downsides worth knowing about.
Cons of Petal Credit Card
Rewards on Everyday Spending
The Petal® 1 “No Annual Fee” Visa® Credit Card doesn’t earn cash back anywhere besides participating merchants. That limits the value you’ll obtain from it, especially compared to other cash-back credit cards.
It’s also disheartening when you consider that the Petal® 2 “Cash Back, No Fees” Visa® Credit Card offers cash back on purchases and up to 2% to 10% back with its merchant offers.
The Petal® 1 “No Annual Fee” Visa® Credit Card likely doesn’t harbor those same perks because it’s an option for consumers who are rebuilding credit, whereas Petal’s original card isn’t.
Like most credit cards, this Petal card levies a variable APR that depends in part on your creditworthiness.
However, its APR range is higher than most other cards, including credit cards for customers with bad credit.
It’s advised to always pay your credit card bill in full to avoid interest, and if you do that, then the APR doesn’t matter. But if you carry a balance at any moment, this card’s high APR will cost you more.
Petal Has Added Fees Before
While the Petal® 1 “No Annual Fee” Visa® Credit Card has no annual levy, the Petal site also mentions that card fees and terms may vary for those who got the card before May 16, 2023.
Some cardholders who had the Petal® 1 “No Annual Fee” Visa® Credit Card before that date obtained notice that they would be charged an $8 monthly fee going forward.
The only way to opt out was to shut down the card. This doesn’t affect new applicants, but it makes you wonder if Petal may do the same thing to more cardholders tomorrow.
How to Use the Petal 2:
- Pay your bill on time every month to secure the maximum cash-back rate.
- Pay off your entire new balance by the due date every month to avoid the card’s high APR.
- Use the Petal app to build good financial habits by monitoring your spending, due dates, and interest charges.
- Take advantage of the card’s free credit score tracking by regularly monitoring your credit.
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If you’re a responsible spender with a limited credit history, there’s not much downside to the Petal 2.
Given that most credit-building cards offer little to no rewards, require deposits and fees, or have low credit limits, the Petal 2 is an attractive option.
The card’s lack of annual and other account fees, the potential for a strong rewards structure, and the ability to qualify for a lower APR than most cards aimed at those working on building their credit has the Petal 2 card smelling sweet.
As long as you commit to paying your balance in full by the due date each month, this card could be a great first step on the path to building your credit.